Canadian housing is ‘pricey,’ but far from a bubble: BMO

OTTAWA—The Bank of Montreal says Canada’s somewhat pricey housing market is likely to cool, not crash.

The bank’s economists say the only real trouble spot is Vancouver, where there are plenty of vacant high-priced condos going begging.

The report suggests that alarms about Canada’s housing market by international observers, from the International Monetary Fund to The Economist magazine, are exaggerated or simplistic.

Even Toronto’s hot condo market — one of the subjects of many of the warnings — is more likely to cool rather than collapse, the economists say.

A comparison of house prices to household incomes shows an increase from a decade ago, but not an excessive one, the report points out.

Nor are most Canadians close to an American-style debt wall that preceded the subprime crash in 2007.

Nevertheless, the BMO economists say house values are somewhat pricey and expect sales, starts and prices to flatten out this year.